Although the resurgence of COVID-19 infections may hinder the aviation industry's recovery, demand for leisure and business travel has been improving of late in-part because more than 50% of the U.S. population is now fully vaccinated. Consequently, Wall Street analysts expect prominent airline stocks Delta Airlines (NYSE:DAL), Alaska Air Group (NYSE:ALK), and Allegiant Travel (AGLT) to deliver significant upside in the near term. So, let’s discuss.Most airline companies reported strong earnings in their last reported quarter thanks to a decent uptick in demand for leisure travel and improvement in corporate travel bookings. Although governments in several countries have reinstated pandemic restrictions with the recent surge in COVID-19 Delta variant infections, the Transportation Security Administration has screened an average of nearly two billion people over the past seven days at U.S. airports. Also, last month, executives said that international travel has started to recover after remaining largely missing from airlines’ rebound.
Furthermore, solid progress on the vaccination front and increasing disposable income will likely help the industry recover faster. In fact, the global airline industry is expected to reach $744 billion by 2026, registering a 12.7% CAGR.
Hence, Wall Street analysts expect prominent airline stocks Delta Airlines Inc. (DAL), Alaska Air Group Inc. (ALK), and Allegiant Travel Company (NASDAQ:ALGT) to rally by more than 35% in price in the coming months.